Keystone's Midday Market Action 4/17/12

VIX drops at the open into the bull camp under 19.00, now printing 18.40.  The financials, XLF, are remaining buoyant and moving up far away from 15.09, bullish for markets.  SOX is at 421.32 taking out the pre-market level-identified level of interest.  The new level to watch is 422.25 so the SOX needs about 90 cents more to move to the bull camp, for now, SOX continues to create a negative influence by staying under 422.25. SPX punched above 1379.50 but has not been able to hold this level over seven minutes. If SPX stays above 1379.50 for 7 to 10 minutes the upside should accelerate.  The 50-day MA is 1377.29 so watch for futher action including a back kiss here in the time ahead.  Keystone exited SSO and although a winning trade, it is flat, and profits would barely buy a hotdog and a coke.  Keystone reentered XCO long. 

Note Aded 4/17/12 at 9:47 AM:  SOX coming up for a look at 422.25, printing a 422.01 high, but pulling back down, watch this today. VIX under 19, bullish.  XLF over 15.09, bullish. SPX:VIX ratio at 75 well over 68, bullish.  TRIN is 1.00 directly on the neutral bull-bear line. With this type of an upward market move, the TRIN should be around 0.8 or lower. Here comes SOX again at 422.08.....whoa 422.60, this will add bull fuel. See if it holds above 422.25. Keystone took profits on USD (double long semi's).

Note Added 4/17/12 at 10:03 AM:  SOX cannot hold 422.25 so far but the battle continues. TRIN under one now, slightly, favoring bulls.  Keystone started shorting INTC.  Also bot more XCO. Here comes SOX running higher again.....422.51....423.03.....bullish for markets, if it holds.

Note Added 4/17/12 at 10:10 AM:  SPX sitting on top of the 1379.50 identifed in this mornings missive.  INTC, IBM and YHOO report earnings today so the INTC short is a dangerous play. Keystone added more INTC shorts.

Note Added 4/17/12 at 10:30 AM:  Bulls are having a party today, SOX is elevated which ushered in the punch higher for SPX.  SPX fought at the 1379.50 level before exploding higher, receiving the acceleration move, fifteen minute ago. SPX is at 1383 between the 1382 support and 1386 resistance. The Dow Industrials are now over 13K. The Nasdaq is over 3000.

Note Added 4/17/12 at 11:07 AM:  SPX punched up thru 1386 resistance, 1388 resistance is next and is a very strong ceiling. The 8 MA crossed up thru the 34 MA on the SPX 30-minute chart which is bullish; the indicators are now all over the 50% levels as well, bullish. Reference the chart posted this morning to monitor the action. The SPX never back kissed the 20-day MA after it failed eight days ago; this level is 1395 and will likely occur if the bulls punch up thru the critical 1388 R. Tech is leading the upside today, unlike yesterday, providing further bull street cred. Keystone sold XCO locking in nice gains in an hour and one-half day trade; will look to reenter again today or tomorrow, XCO remains a very constructive long play.

Note Added 4/17/12 at 1:45 PM: The bulls are running today, the Dow Industrials, INDU, are up 200 points. The sturdy SPX 1388 R folded like a cheap suit so the 20-day MA at 1395 is a great target for the next resistance test and would serve as a possible place to add index shorts. The drama today is the IBM, INTC and YHOO earnings hitting after the bell. The Nasdaq is up an obscene 60 points today, in the 3050 vicinity, its 20-day MA is 3068. If the markets run up to their 50-day MA's, and the day closes out, and then the tech earnings lay an egg, this level would serve as an ideal short area. But, if the tech earnings are good, the markets would print higher prints tomorrow and the SPX may want to run to that 1400 shown by the sideways symmetrical triangle in this morning's chart. AAPL is up over 4% today and since Apple is the markets, the Nasdaq is rockin' and so are the markets, the opposite of yesterday's action. The Dirty Thirty ran up both days less affected by Apple. Higher SOX, now moving towards 425, and lower VIX, now under 18, as well as the SPX breaking thru 1393.50, lit the way for the bulls today as highlighted in this morning's missive before the open. Keystone added more BOIL, a big add, continuing to wait for Godot, there he is, it looks like he is off in the distance walking this way.

Note Added 4/17/12 at 2:21 PM:  The strength in utilities, UTIL, this week is very bull friendly. Even if/when markets take the next leg down, if utes do not lead or move down coincidentally, the move down would not have oomph, so keep watching UTIL.  Seasonality-wise, during OpEx week Wednesday typically sees a higher print then Tuesday, this would hint that tests of those 20-day MA's may occur tomorrow.  But, markets can manifest themselves in odd ways.  If tech earnings lay an egg after the bell, markets will sell off tomorrow morning, but, the seasonality may still ring true if the markets spike back up to print higher highs intraday, and then roll over. Stay alert. SPX is now tagging the highs of the day, 1392 plus. The minute charts appear negatively diverged, however. The remaining trade today may center around the action of IBM, INTC and YHOO, watch them closely into the close. Keystone shorted more INTC. For now, setting up the vegetable garden requires attention.

Note Added 4/17/12 at 3:37 PM:  Here comes SPX up to back kiss the 20-day MA at 1395-ish.  The HOD is 1393-ish, two points away, close enough to taste it; this level is close enough in the neighborhood to call it a back kiss on the daily chart, in case tech wants to give it up after the close. SPX receives a spank down off the negative divergence on the minute chart so that run higher at 3:30 PM went nowhere.  IBM, INTC and YHOO are banging out or near the highs of the day right now, therefore the bulls believe in blow-out earnings on the way shortly. Will these tickers become the Three Muskateers launching markets higher tomorrow, or the Three Stooges receiving a pie in the face? We will know within the hour. The tension mounts. Keystone reentered XCO long.

Note Added 4/17/12 at 4:11 PM:  INTC earnings hit immediately at the close in-line with estimates but the stock is selling off over a percent on the intial knee-jerk.  YHOO results beat and it bounces over 2% AH's. Thus, it looks like Keystone's INTC shorts may work out. Thank you to the two of you that were holding the stretcher ready to carry Keystone out but the trade should be okay so you can put the stretcher back behind the door. IBM hits beating on the bottom line but a bit light on top line revenue, the initial knee-jerk is down one percent or more.  That's funny, the two companies that would have been expected by all the bullish analysts to pop, INTC and IBM, are selling off currently, and the one folks consider sick, YHOO, is gaining. Kick INTC down the stairs boys, and help good ole Keystone out.